Summary
The Ninth Circuit affirmed the Medicaid-fraud convictions of Peter Larm, M.D., and Haruko Larm under 42 U.S.C. § 1396h(a)(1). The court held that sufficient evidence supported findings that the defendants knowingly submitted false billing statements for office visits, injection administration, and allergy serum. It also held that materiality was a question of law and rejected the defendants’ due process challenge based on the lack of formal adoption of the billing codes. Judge Wiggins concurred in part and dissented from affirmance of the office-visit convictions.
Topics
Practice areas
Questions Presented
- Whether sufficient evidence supported the convictions for knowingly submitting materially false Medicaid claims.
- Whether the district court properly determined as a matter of law that the false statements were material rather than submitting materiality to the jury.
- Whether prosecution under 42 U.S.C. § 1396h(a)(1) violated due process because the Medicaid billing code book was not promulgated under Hawaii's Administrative Procedure Act and allegedly failed to provide fair notice.
Holdings
- The evidence was sufficient for a rational jury to find that the Larms knowingly submitted materially false claims using billing code 90040 for services actually covered by code 90030, including services rendered when Dr. Larm was not present.
- The evidence was sufficient to support the convictions on the administration counts.
- The evidence was sufficient to support Dr. Larm's convictions on the allergy counts.
- Materiality under § 1396h(a)(1) is a question of law for the court, not a question of fact for the jury.
- The convictions did not violate due process because § 1396h(a)(1), rather than the Medicaid billing codes, supplied the legal prohibition and provided adequate notice of the proscribed conduct.
Key quotations
“We think, therefore, that the weight of the authority requires us to conclude that the district court properly treated the question as one of law.” (824 F.2d at 784)
“Here, the statute forbids knowingly false material statements, terms that are adequate to inform the ordinary person of its bounds.” (824 F.2d at 784)
Factual background
Peter Larm was an allergist and an approved provider under Hawaii's Medicaid program; his wife, Haruko Larm, managed the office and oversaw billing. The Larms used billing code 90040 for nurse-administered allergy shots when Dr. Larm was not present, although code 90030 specifically covered minimal services and injections not necessarily requiring a physician's presence. They also submitted claims for injections self-administered by patients and allegedly billed for more expensive allergy serum than was actually provided, resulting in excess charges totaling $882.21.
Procedural history
A grand jury indicted the Larms on ninety-eight counts of Medicaid fraud. Following trial, Dr. Larm was convicted on seventeen counts involving claim forms he signed, while Haruko Larm was convicted on all but the allergy counts. The Ninth Circuit reviewed the sufficiency of the evidence, the materiality ruling, and the defendants' due-process and fair-notice challenges, and affirmed.